Dave Starling: “Not just a job, but a way of life"

Highlights from Kansas City Southern President and CEO Dave Starling’s remarks upon receipt of the Railroader of the Year Award, Union League Club, Chicago, Ill., March 13, 2012. “Railroading in North America: This Generation to the Next”

“I’d like to begin by thanking Railway Age for bestowing this honor upon me. I could probably come up with a dozen people who would be more worthy recipients but none could be more appreciative and honored than me to be named “Railroader of the Year.” When I look at the list of past honorees, I am truly humbled. I am fully aware that this recognition says less about me than it does about the contributions of the over 6,000 employees who work tirelessly every day to make Kansas City Southern a great company.”

“As the railroaders in this room tonight are keenly aware, the profession we have chosen is not just a job, but a way of life; and without the support of our wives, none of us would have been successful.”

“It wasn’t that long ago that there were a lot of doubters out there. Doubters as to whether KCS would survive surrounded by a land of giants. As the rest of the industry consolidated, KCS got even smaller—many would say to the point of irrelevance. Certainly, there were doubters as to whether KCS would ever get full control of the Mexican rail concession. Doubters as to whether we could ever put the two rail systems together. Well, the fact that I’m giving this speech tonight is pretty good evidence that the doubters were wrong.”

“We’re fortunate in the railroad industry to have such a rich tradition of remarkable leaders and mentors to pass down wisdom and knowledge from one generation of leadership to the next. It’s truly unique, something you don’t find in too many industries. Just look at Matt’s and Wick’s speeches, and mine tonight. Who do we mention – Lou Menk, Darius Gaskins, John Reed, Rob Krebs, Graham Claytor, David Goode, Mike Haverty – it’s a list of strong men and powerful leaders, who each demonstrated vision, persistence and an unrelenting focus on execution. They were leaders who directed their companies during the “not-so-golden age of railroading.” They fought one type of battle — pre-Staggers — and another type of battle — post-Staggers. They were tough in uncertain times.”

“KCS’ strategic positioning as a North American carrier connecting the industrial heartland of Mexico to the industrial heartland of the U.S. with connections to every Class I carrier gives us a wonderful opportunity to grow our franchise in the future and create even better shipping options for North American shippers.”

“In order to be able to continue to reinvest in our railroads to support the American economy, our industry must be able to generate acceptable returns on this investment, and that means being able to price to the market. There are protections already in place for shippers who feel that their rates may be excessive when not balanced by competitive alternatives, and the Surface Transportation Board has shown it will take action in such cases. However, this is not the time to go back to the pre-Staggers era of regulated rate-making or government micro-management of industry practices. Instead, the Board should work within the existing regulatory structure to see where improvements might be made to make the rate case process less costly and more accessible and to correct only abusive railroad practices.

“Attracting and retaining the next generation railroader will require new thinking by management. The next generation of leaders will need to understand both the skill sets necessary for success and be prepared to appropriately invest in the training and technology to meet those needs while at the same time understanding and respecting the work-life balance issues dictated by a changing demographic in their labor force. The next generation of rail industry leadership will need to embrace new operating advancements, evolutions, and implement keys to productivity and growth. Our rail suppliers and service providers will be key partners in achieving these objectives. Increasing equipment utilization with a more efficient fuel burn and just-in-time capacity expansion will be key to accommodating future growth. Technology, skilled employee training and performance, and working with our suppliers and service providers will be central to avoiding network congestion and inefficiency for the next generation of railroaders.”

“I’d like to leave you with five fundamental things that I would like to see the next generation of industry leadership focus on:

“First, remember the lessons of history and protect the extremely successful and balanced regulatory environment we enjoy today; yet be willing to work with our shippers and the regulators to improve the process for rate cases and to ensure that shippers have a fair, accessible, and efficient forum by which their concerns can be heard.

“Second, continue to foster the current rail renaissance by re-investing in our infrastructure, equipment, and human resources so the rail industry can keep North America competitive and create new jobs for our people in the global economy.

“Third, be prepared to go out and recruit the next generation of railroaders from a pool of young people who will need a strong work ethic and then make the investments in training and knowledge transfer that will allow them to be successful. And be prepared to adapt your management style to meet the needs of a new demographic in your workforce, characterized by technological sophistication, greater diversity and different expectations regarding work-life balance.

“Fourth, find ways to work together within the existing regulatory and economic framework.

“Fifth; make sure we never forget, and never let the American public forget, the indispensable importance of the rail industry to the North American economy and the need to keep this industry healthy and able to grow. It is the most efficient, environmentally responsible and privately financed way to move goods we need for everyday life and we can never forget its importance to our national competitiveness. I am very confident that the next generation of industry leaders will evolve the industry over the next decades to make sure its proud traditions and contributions to our economic well-being continue, doing so in new and exciting ways that will be good for everyone. I want to thank everyone for being here tonight. This is such a wonderful time to be in the railroad industry. Civic leaders, customers, environmentalists and investors to name a few, are beginning to understand how important our industry is in maintaining our global competitiveness. We are an industry that has franchises which cannot be duplicated; we are part of the fabric of this great nation and always will be. We should all be proud to be called railroaders!”